U.S. pledges $1 billion aid to Ukraine, condemns Russia

Mar. 4, 2014
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President Obama / Saul Loeb, AFP/Getty Images

by David Jackson, USA TODAY

by David Jackson, USA TODAY

WASHINGTON - The Obama administration announced a $1 billion package of economic and energy aid to Ukraine on Tuesday, part of its emerging response to Russian military activity in Crimea.

President Obama, aides and allies are also considering a number of economic sanctions against Russia for its incursion into the Crimea region of Ukraine.

Again accusing Russian President Vladimir Putin of violating international law by sending troops to Crimea, Obama said Tuesday that Russia is weakening itself regionally and internationally.

"Countries near Russia have deep concerns and suspicions about this kind of meddling," Obama said, predicting that its actions may "push many countries further away from Russia."

The administration announced the $1 billion in loan guarantees for Ukraine as Secretary of State John Kerry landed in Kiev early Tuesday for talks with the new government.

Kerry said Putin could "de-escalate the situation" by pulling soldiers back "to the barracks" of bases Russia has long had in Ukraine, and by adhering to a long-standing agreement that limits the number of Russian troops in the region.

Putin, meanwhile, said in televised remarks Tuesday that he reserves the right to protect Russian-speaking people in Crimea after what he called "an anti-constitutional" coup last month that toppled Ukraine's pro-Russia president.

But Putin also seemed to soften his tone by saying that full military force in Ukraine would be a "last resort" - though he said he would not be deterred by economic sanctions from the West.

"All threats against Russia are counterproductive and harmful," Putin said.

Obama, speaking with reporters as he unveiled a proposed budget for fiscal 2015, said he welcomes reports that Putin is "is pausing for a moment and reflecting on what's happened."

The administration's Ukraine plan includes what Obama called "technical assistance" to help the country rebuild its battered economy and plan for democratic elections in May.

The Obama administration has suspended military cooperation and bilateral trade talks with Russia, and discussed boycotting a Group of Eight nations summit that Putin is expected to host in June in Sochi.

During his visit to Kiev, Kerry said he and other administration officials are working together in an effort to "isolate Russia politically, diplomatically, and economically" if it does not pull back troops in Crimea.

Both Kerry and Obama said that, if Russia stands down, "international monitors" could be sent to Ukraine to protest the interest of Russian speaking citizens.

Obama, who spoke with a series of other national leaders over the weekend, said he will be making more calls throughout the week. The president spoke Tuesday with German Chancellor Angela Merkel.

The president's weekend phone calls included one with Putin, but the two leaders could not agree on a resolution to the standoff over Ukraine.

Congress has to sign off on the $1 billion in loan guarantees but leaders have said they want to take action against Russia, and have given Obama plenty of advice.

House Speaker John Boehner, R-Ohio, pledged to work with the Obama administration "on measures to impose consequences on Russia for its hostile act."

One of Boehner's suggestion: Expedite approval of U.S. exports of natural gas, to undercut Russian energy exports.

Republicans like Sen. John McCain, R-Ariz., have also criticized Obama, saying his "feckless" foreign policy emboldened Putin to move into Crimea.

Without economic assistance, Ukraine is likely to default on its debts. Ukraine's finance minister has said the country needs $35 billion to get through the year.

The $1 billion package announced by the Obama administration includes "technical expertise" to help reform Ukraine's financial system. The International Monetary Fund is demanding changes as a condition for loans.

The loan guarantee program also includes energy assistance designed to counter Russia's announcement Tuesday that it is ending discounts in national gas supplies to Ukraine.

The Obama administration statement said the U.S. will help with "recovering stolen assets," a reference to allegations that former Ukraine President Viktor Yanukovych and associates took billions of dollars with them when they fled the country.

Russia does have "legitimate interests" in what happens in a neighboring country, Obama said, but "that does not give it the right to use force as a means of exerting influence inside of that state."

Obama said that he and allies are "calling for a de-escalation of the situation" in Ukraine, and "international monitors" that can go into the the country immediately.

"Above all," Obama said, "we believe that the Ukrainian people should be able to decide their own future."